Google Adwords is Google’s advertising system which functions like an auction where businesses bid to place their ads in the search engine results for relevant keyword searches. With Google Adwords, advertisers can create optimized ad campaigns that drive relevant, high-quality traffic to their websites and landing pages. Advertisers set the budget and target specifications for their campaigns and can include options in their ads like links to specific sections of the website, address, or a phone number.
How does it work?
Here is an example:A user searches for “red shoes”. If there is more than one advertiser bidding on this keyword which Google finds to be relevant for the search, an auction is prompted.
To determine the ranking of the search results, Google looks at two key factors: the advertiser’s maximum bid and quality score.
- Maximum Bid: The most you, the advertiser, are willing to pay per click within your advertisement platforms like Google AdWords and Bing Ads.
- Quality Score: This is Google’s rating of the quality of your keywords. It is based on several factors including the click-through rate, the relevance of the words in your advertisement, your landing page quality, and historically how well your advertisements performed. To increase your quality score, search for highly relevant keywords to add to your campaign so you increase your click-through rate. To determine how much you pay for an ad, Google looks at your quality score. The higher your quality score, the less you pay for a higher position.
Here is the formula for calculating your Ad Rank:
(Competitor Ad Rank x Your Quality Score)=Ad Rank
Please note, that while there are similarities between an Amazon PPC advertising campaign to one on Google Adwords, they are, at the end of the day, fundamentally different. For instance, Google Adwords will take you to a brand’s website while Amazon PPC never takes you off of Amazon. Additionally, Amazon PPC campaigns are not available for retargeting or gathering behavioral information. Be sure to do your research to understand which PPC option is right for your e-commerce business.